Economy

Incredibly Simple economics

By |2018-09-28T16:49:40-04:00September 28th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There are more than 300 PhD Economists working on staff for the Federal Reserve. The central bank tells us that they “represent an exceptionally diverse range of interests and specific areas of expertise.” Perhaps, but they are all PhD Economists, aren’t they? These highly educated people cover a broad range of topics, for sure, and all from the same starting [...]

The Wizard of Draghi

By |2018-09-28T12:32:51-04:00September 28th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Central bankers must be using some other dictionary than the one available to all the rest of the world. Janet Yellen, for example, abused the word “transitory” for so long it became unrelatable to the concept of time; which was its original meaning. It evolved into an excuse for explaining how forecasts weren’t wrong, they just applied always to the [...]

The Numbers In Japan

By |2018-09-28T11:48:04-04:00September 28th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What is economic growth? This isn’t an easy question to answer. Most people might respond with a reference to GDP. That wouldn’t necessarily be an incorrect one, but it may not be exactly on point, either. GDP was developed in order to try and assess economic growth, and over the years has simply become a stand-in for it. That’s true [...]

Make Your Case, Jay

By |2018-09-27T17:31:56-04:00September 27th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

June 13 sticks out for both eurodollar futures as well as IOER. On the surface, there should be no bearing on the former from the latter. They are technically unrelated; IOER being a current rate applied as an intended money alternative. Eurodollar futures are, as the term implies, about where all those money rates might fall in the future. Still, [...]

Exhibit A For No Growth

By |2018-09-27T16:53:16-04:00September 27th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The Bureau of Economic Analysis (BEA) revised Q2 GDP to a 4.07464% continuously compounded annual rate from 4.13987%. More importantly, the BEA provided revised benchmark estimates for corporate profits. The good news is that the benchmark was higher. The bad news is that companies still aren’t making any money. All the revisions applied to long ago years (2008 and 2009 [...]

Chicken Hawks

By |2018-09-26T18:23:47-04:00September 26th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There had been whispers that the FOMC would have to undertake a second “technical adjustment” this year. Is it coincidence that the eurodollar futures curve inverted on the same day, June 13, Jay Powell announced the first one? Perhaps, but given what we are talking about here there is a fair chance they are related, especially in the close aftermath [...]

Impossible Hawks

By |2018-09-26T16:09:57-04:00September 26th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On December 8, 1940, Winston Churchill wrote to Franklin Roosevelt. The situation was indeed grim, France having fallen to the Germans and the United Kingdom pushed right off Continental Europe. Defeats in the Pacific were some of the worst in the long history of the British Nation. The battle was now raging over English skies, the island isolated in every [...]

Housing History And Why The Yield Curve Got So Flat

By |2018-09-26T11:44:35-04:00September 26th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The global economy was in very rough shape in 1980. Caught in the spiral of the Great Inflation, there was practically nowhere to hide from ripping upheaval – beyond just the economic problems. Despite trying seemingly everything for an entire decade, nothing Economists came up with would rebalance the system. They kept saying they only needed time for their schemes [...]

What’s Worth It

By |2018-09-25T17:40:07-04:00September 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Earlier this year, two law professors at the University of California, Berkeley School of Law took issue with of all things Tobin’s Q. Though named for James Tobin, the idea had been introduced much earlier by several people. Tobin popularized one view of the concept. Robert Bartlett and Frank Partnoy objected to many of the contemporary uses. To judge firm [...]

Your Semi-Annual Golden Week Reminder

By |2018-09-25T11:56:06-04:00September 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s that time of year. September, the leaves start to turn and the air grows crisp. Autumn smells arrive; the Chinese prepare for their nationalist Golden Week. Ever since 2014 and the dollar’s rise, that is, eurodollar tightening especially in Asia, these holiday bottlenecks are never boring. To be shut down for an entire week in early October, the banking [...]

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